One of the poorest London boroughs today launched a ground-breaking bursary scheme to encourage more teenagers to go to university.

Tower Hamlets will give away £1.2 million to students who might otherwise be put off higher education because of money worries.

It is the first council in the country to set up such a far-reaching scheme and comes after it launched a similar project to pay for younger teenagers to stay on at school.

Critics said the money should instead be spent on front line services.

Lutfur Rahman, mayor of Tower Hamlets, said: “This is a wonderful opportunity for young people in Tower Hamlets. For local teenagers who thought university was a pipe dream, I hope this scheme will change their minds.”

He said increased tuition fees and living costs were putting many Tower Hamlets students off going to university. The borough is one of the poorest in London, with almost half of children there eligible for free school meals. Just over 23 per cent of all youngsters in the borough go to university.

But Tower Hamlets councillor Peter Golds said the mayor’s scheme was a “vanity project”. He said: “I don’t think the money is there for it. It should be spent on front line services such as social workers in addition to doing things the council has to do such as rubbish collection.”

But Mr Rahman said many Tower Hamlets students were not from wealthy backgrounds and added: “Any help we can give them is money well spent.”

He said the money being used came from savings from “belt tightening” over the past three years.

Under the new scheme 400 people starting university in September will be paid £1,500 over two years. Another cohort starting university in 2014 will get the same amount. A spokesman for the council said if more than 400 apply, the bursaries will go to the most needy.